On July 1, the Nashville Predators made a significant splash in the NHL, spending a staggering $111.5 million on the first day of free agency, leading all teams in expenditure.
Their major acquisitions included high-profile stars Steven Stamkos ($32M), Jonathan Marchessault ($27.5M), and Brady Skjei ($49M). Overall, NHL teams spent a record $1.12 billion in contracts on that day, spurred by an increase in the NHL’s salary cap to $88 million, the largest jump since before the COVID-19 pandemic.
Nashville’s spending spree is notable not only for its scale but also because Tennessee, where the team is based, does not levy a state income tax. This financial advantage potentially allows players to retain more of their earnings compared to states with higher tax rates. Barry Trotz, the Predators’ general manager, acknowledged this advantage during an interview on TSN’s Overdrive, stating,
“I think it is an advantage because your dollar goes a little bit farther. But for the elite players, the top players, they’re just looking for a place that is serious about winning.”
Trotz suggested that while tax benefits might be more significant for middle-tier players, the draw for elite players remains a team’s commitment to winning. However, the spending patterns in free agency indicate that this tax advantage does influence top players as well. Alongside Nashville, other teams in tax-friendly states—such as the Florida Panthers, Tampa Bay Lightning, Vegas Golden Knights, Dallas Stars, and Seattle Kraken—also made significant investments, collectively accounting for nearly a quarter of the $1 billion-plus committed at the start of free agency.
The Florida Panthers retained star forward Sam Reinhart, while defenseman Brandon Montour and forward Chandler Stephenson signed with the Seattle Kraken. The Vegas Golden Knights extended Noah Hanifin’s contract, and the Tampa Bay Lightning added former Pittsburgh Penguins star Jake Guentzel to their roster. Guentzel highlighted the appeal of Tampa, mentioning the positive aspects of living in Florida and the electric atmosphere at Lightning games, along with the financial benefits.
The recent success of teams in tax-friendly states is evident, with the Panthers (2024), Golden Knights (2023), and Lightning (2021, 2020) winning four of the last five Stanley Cups. Despite the uniform salary cap across all 32 NHL teams, the inherent tax advantages for teams like the Predators create a competitive edge in attracting and retaining talent.